How an $87,000 Rug Could Take Down Merrill's Boss

They called him "Superthain." John Thain, Merrill Lynch's Clark Kent-lookalike CEO, had the public image of a straight-shooting, clean-living superhero CEO. Billions of dollars in losses haven't stained that, but an $87,000 rug could.

Thain personally authorized a $1.2 million redecorating spree a year ago, Charlie Gasparino writes in the Daily Beast, even as Merrill prepared to slash jobs and expenses. Merrill's CEO was hailed as a hero for selling the company to Bank of America for $28 billion in September, as Wall Street collapsed around him. It was sold for a bargain price, but the firm met a far better fate than Bear Stearns or Lehman Brothers. Questions about whether Merrill hid the true state of its balance sheet from Bank of America, raised after the brokerage house reported $15 billion in fourth-quarter losses, haven't unseated Thain. But the lavish details of his spending on his Merrill Lynch office could:

The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a "mahogany pedestal table" for $25,000; a "19th Century Credenza" in Thain's office for $68,000; a sofa for $15,000; four pairs curtains for $28,000; a pair of guest chairs for $87,000; a "George IV Desk" for $18,000; 6 wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a "Roman Shade" for $11,000; a "custom coffee table" for $16,000; something called a "commode on legs" for $35,000; a "Regency Chairs" for $24,000; "40 yards of farbric for wall panels," for $5,000 and a "parchment waste can" for $1,400.

The documents also show that Thain signed off on the purchases personally. "Labor to relamp the six wall sconces" cost $3,000, and Thain authorized the payment of another $30,000 to pay the expenses Smith incurred in doing the work. Thain has hired Smith—whose celebrity client list includes Steven Spielberg, Michelle Pfeiffer, Cindy Crawford and Sir Evelyn de Rothschild—to design and decorate his private residences. They include a Manhattan apartment at 740 Park Avenue, and his 10-acre mansion in Rye, NY.

The "commode on legs," in particular, is drawing ridicule on the Yahoo Finance message boards. It is the perfect metaphor how Thain has flushed his career down the toilet.

Thain, a technology executive at Goldman Sachs, was tapped to take over the New York Stock Exchange from Dick Grasso, whose $187.5 million retirement package drew outrage. His reputation for personal rectitude is what got him that job — as well as the Merrill one, where he replaced Stan O'Neal, a secretive autocrat. Take away that aura of righteousness, and what is left of Thain? Certainly no Clark Kent. He's just another Wall Street disappointment.